The US dollar remained firm against other major currencies at the start of the European trading session on Wednesday. Investors are focusing on several key events today, including Germany’s unemployment rate data for April. In the afternoon, the US Treasury will hold a 5-year bond auction, while the Federal Reserve is set to release the minutes from its May policy meeting.
New Zealand Cuts Policy Rate, NZD/USD Edges Higher
Earlier in the Asian session, the Reserve Bank of New Zealand (RBNZ) cut its policy rate by 25 basis points to 3.25%. This move met market expectations. The RBNZ also lowered its policy rate forecast for September 2025, adjusting it from 3.23% to 3.12%. Acting Governor Christian Hawkesby emphasized that future policy moves are not predetermined, noting that inflation is currently within the target range.
Following the rate cut, the NZD/USD pair recovered slightly after a near 0.9% drop the previous day. It gained more than 0.2% to break above 0.5950.
US Market Sentiment Boosts Dollar Index
The US dollar index rose about 0.6% on Tuesday amid improved market sentiment toward the US economy. The benchmark 10-year US Treasury yield fell over 1%, signaling strong demand for government bonds. Meanwhile, the S&P 500 climbed more than 2%, reflecting investor optimism.
In early European trading, the dollar index remained positive, trading above the 99.50 level.
Japan Adjusts Bond Issuance, USD/JPY Stays Elevated
Reuters reported that Japan’s Ministry of Finance plans to reduce issuance of ultra-long-term bonds in the current fiscal year ending March 2026. Additionally, Bank of Japan Governor Kazuo Ueda highlighted ongoing uncertainties from US-Japan tariff negotiations.
USD/JPY rose more than 1% on Tuesday and traded within a narrow range just above 144.00 during Wednesday’s European session.
Euro and Pound Remain Under Pressure
The EUR/USD pair fell about 0.5% on Tuesday, giving up earlier weekly gains. It continued to face mild bearish pressure and moved toward the 1.1300 level in early European trading on Wednesday.
Similarly, GBP/USD closed lower on Tuesday and remained weak, trading below 1.3500.
Gold Prices Stabilize After Decline
Gold prices struggled to gain traction amid positive market sentiment on Tuesday, dropping more than 1%. However, during Wednesday’s European session, gold appeared to stabilize, holding above the $1,330 level.
In summary, the US dollar held steady as markets awaited key economic data and Fed minutes. New Zealand’s rate cut gave a modest boost to the kiwi, while USD/JPY stayed elevated amid Japan’s bond adjustments and trade uncertainty. Meanwhile, the euro and pound faced pressure, and gold prices showed signs of stabilization.
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